Can MSPs and small businesses be Great by Choice? That's the big question as best-selling Author Jim Collins' IT Nation keynote this morning. ConnectWise CEO Arnie Bellini just tuned the stage over to Collins.

Collins is the name behind Built to Last, Good to Great and Great By By Choice. He sees three key reasons why great companies consistently crush weak companies. “The X Factor of leadership is not personality,” Collins said. “Instead its humility. Fanatical discipline. Productive paranoia. Empirical creativity.”

Collins then walked attendees through those qualities and others.

Fanatical Discipline

He described a 20-mile march of discipline, where executives just stay focused on long term goals using short-term clockwork. An example: Moore’s law, which called for Intel to double processing power every 18 months.

“What is your 20 mile march?” he challenged attendees. “The signature of mediocrity is chronic inconsistency.”

“Most overnight successes,” he added, “are 20 years in the making.”

So how does Collins explain Facebook? “Nice start,” he quipped.

Empirical Creativity

Imagine a ship is bearing down on you – a threat or a disruption. You’ve got a limited amount of gun powder. You fire and miss the ship, said Collins

Or, instead, take a little bit of gunpowder, fire small bullets a few times to calibrate your shot. In other words: Make your big bets on empirical validation. Fire a few small bullets, get the information you need, then fire your big cannon.

“That’s how you blend creativity and discipline.”

Productive Paranoia

“As entrepreneurs you understand a basic truth: The only mistakes you can learn from are the ones you survive.”

Collins then asked the following question multiple times: “Can you go an entire year without a penny of revenues?”

What we’re going to live through for the rest of our lives is disruptive and chaotic – the strong will be stronger and the rest will be crushed, he predicted. Make sure your team can adjust to anything, he added.

The greatest danger is not failure. Instead, being successful without understanding why is the real danger.

A prime example: Southwest understands why they only fly 737s:

  • All pilots can fly all the planes in the system
  • It’s easier to stock replacement parts

The Southwest business plan was to copy Pacific Southwest Airlines. “All you need to do is cross out the name Pacific -- and that's how Southwest got its start,” said Collins.

But here’s what’s interesting: Both companies faced the same fuel, deregulation and business issues. Through all that change, PSA kept on trying to change. PSA changed its recipe 70 percent and Southwest changed only 20 percent. PSA died. Southwest went on to become the most successful company in its industry.

What the great companies had was (A) a deep understanding of their recipe and (B) a commitment to changing the right things. “If you get that wrong you’re likely to go the way of PSA.”

Lucky Winners? Not

The winners typically have luck – but they are not “luckier” according to the real data. “The question is not whether you will get luck. You will. The question is: What will you do with the luck that you get? It’s how you respond in the face of a luck event.”

As leaders are we responsible for our performance? Or do we get to contribute our performance to things outside of our goals? “Greatness is not primarily a function of circumstance or luck,” said Collins. “It’s first and foremost a matter of choice and discipline.”

So in the end what is a great company? How would you know?

  • Big does not equal great and great does not equal big.
  • Instead, a great company of any size is one that meets three tests. (1) It delivers superior results; (2) it makes a distinctive impact on the world it touches – in other words who would miss you if you’re gone?; (3) it achieves lasting endurance through multiple generations of leaders.

For entrepreneurs that means you don’t have a great company if it can’t be great without you, he added.